Exhibit 99.1
AptarGroup Reports Fourth Quarter and Record
Annual Results; Recaps Acquisition Activity
CRYSTAL LAKE, Ill.--(BUSINESS WIRE)--Feb. 9, 2006--AptarGroup,
Inc. (NYSE:ATR) today reported record annual results in 2005 that were
fueled by the Company's 40th consecutive year of increased sales as
well as fourth quarter results in line with expectations. The Company
also recapped its recent acquisition activity.
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2005, sales decreased one
percent to $338.8 million from $343.3 million in the prior year. Sales
excluding changes in foreign currency exchange rates increased three
percent from the prior year. Custom tooling sales in the quarter
decreased to $14.6 million from $18.3 million a year ago.
Net income decreased in the fourth quarter to $23.7 million from
$24.0 million a year ago. Diluted earnings per share increased to $.66
per share from $.65 per share in the prior year. Negatively impacting
the fourth quarter 2005 net income were charges of approximately $0.5
million ($.01 per diluted share) related to the previously announced
Redeployment Program affecting AptarGroup's French fragrance/cosmetic
operations. Free cash flow (cash flow from operations less capital
expenditures) increased to approximately $11.7 million in the quarter
compared to $6.3 million a year ago.
ANNUAL RESULTS
For the year ended December 31, 2005, sales increased six percent
to a record $1.4 billion from $1.3 billion in the prior year. The
impact of changes in foreign currency exchange rates on sales was not
significant for the year. Custom tooling sales decreased to $39.6
million from $58.5 million a year ago.
Net income for the year increased to a record $100.0 million from
$93.3 million a year ago. Diluted earnings per share increased 10
percent to $2.77 per share from $2.51 per share in the prior year.
Included in the 2005 earnings per share is the positive impact of
reduced income taxes recorded in the second quarter related to
previous years' research and development credits in the U.S. and tax
changes in Italy ($.09 per diluted share), and the negative effects of
the Redeployment Program charges recorded in the second half of the
year ($.07 per diluted share). Free cash flow increased to a record
level of approximately $90.5 million for the year compared to $63.5
million a year ago.
MANAGEMENT COMMENT
Commenting on the quarter, Carl A. Siebel, President and Chief
Executive Officer, said, "Our fourth quarter results were in line with
our expectations. We had anticipated a decline in sales to the
pharmaceutical market compared to strong fourth quarter 2004 sales to
makers of generic pharmaceutical products. The adverse impact of this
sales decline was mitigated primarily by increased sales to the food
and beverage market and additional sales from companies acquired in
2005. Despite this mix of sales and rising raw material costs, we were
able to maintain our operating margin due to our cost containment
efforts and, by focusing on working capital, we were also able to grow
free cash flow. Additionally, we benefited in the quarter from a lower
effective tax rate."
Siebel added "The year 2005 marked our 40th consecutive year of
increased sales and we broke the $100 million net income mark for the
first time in the Company's history. We also generated a record level
of annual free cash flow.
"This was also one of our most active periods in terms of
acquisitions. We purchased several well run companies that will add to
our future growth. In addition, to further enhance shareholder value
we increased our dividend 33 percent and repurchased over 1.2 million
shares of our stock. I'm pleased that after considering these actions
and our recent acquisition activity, our balance sheet remains
strong."
BUSINESS SEGMENT PERFORMANCE
For the quarter, sales of the Dispensing Systems segment decreased
two percent to $285.1 million from $292.0 million in the prior year.
The decrease is primarily due to a decline in sales to the
pharmaceutical market when compared to the strong fourth quarter 2004
which was driven by exceptionally strong sales to generic drug makers.
For the year, sales increased five percent to $1.15 billion from $1.09
billion in the prior year. Fourth quarter Dispensing Systems segment
income (income before interest expense in excess of interest income,
corporate expenses, income taxes and unusual items) decreased to $38.4
million from $38.7 million in the prior year. For the year, segment
income increased to $153.2 million from $142.6 million in the prior
year.
For the quarter, sales of the SeaquistPerfect segment increased
two percent to $55.3 million from $54.1 million in the prior year. The
increase is primarily due to additional sales from acquired
businesses. For the year, sales increased 13 percent to $241.5 million
from $213.9 million in the prior year. Fourth quarter SeaquistPerfect
segment income decreased slightly to $3.6 million from $3.7 million a
year ago. For the year, segment income increased to $21.1 million from
$18.1 million in the prior year.
ACQUISITION RECAP
Carl Siebel commented on the Company's recent acquisition
activity, "In addition to the first quarter 2005 acquisition of EP
Spray System, a Swiss manufacturer of aerosol valves with bag-on-valve
technology, we finished the year with several other strategic, bolt-on
acquisitions. As we previously announced in the fourth quarter, we
acquired MBF, a leading French designer and manufacturer of decorative
packaging components primarily for the high end of the
fragrance/cosmetic market. Later in the fourth quarter, we acquired
the remaining half of AirlesSytems SAS (a 50/50 joint venture) for
approximately $17 million. AirlesSystems, located in France, designs
and manufactures unique dispensing systems that prevent air from
entering the dispenser in order to protect product integrity and
increase shelf life particularly, for cosmetic and skincare products.
Finally, earlier this week we completed the acquisition of CCL
Dispensing, a U.S. manufacturer of dispensing closures.
"As we have indicated in the past, our strategy is to acquire
businesses that possess unique technology, quality products and
valuable market share. With these new products, technologies and
capacity, we are enhancing the services and products we offer our
global customers, and consequently, we are well positioned for future
growth".
STOCK OPTION ACCOUNTING
In accordance with the adoption of a new accounting standard in
the first quarter 2006, AptarGroup's income statement will begin
reflecting non-cash expenses associated with stock options. AptarGroup
estimates the full year impact of stock option costs based on current
assumptions to be approximately $.24 per diluted share, of which $.13
per diluted share is expected to be recorded in the first quarter,
with the remaining amount expected to be recorded ratably over the
remaining quarters of the year.
OUTLOOK
Siebel commented, "While the competitive environment remains
challenging, we expect sales to our major markets to increase in the
first quarter compared to the prior year excluding the effects of
changes in exchange rates. We anticipate the first quarter earnings
will be reduced by approximately $4.6 million ($.13 per diluted share)
because of the adoption of the new stock option accounting rule.
Diluted earnings per share for the first quarter of 2006 are currently
expected to be in the range of $.53 to $.58, including the impact of
expensing employee stock option program costs previously mentioned,
compared to $.60 per share in the prior year."
First Quarter 2006 Estimated Diluted Earnings Per Share
THREE MONTHS ENDED
MARCH 31,
--------------------------------
Estimated 2006 Reported 2005
-------------- -------------
Diluted Earnings Per Share Before
Stock Option Costs $.66 to $.71 $0.60
Impact of Stock Option Costs (.13) ---
--------------------------------
Diluted Earnings Per Share $.53 to $.58 $0.60
================================
OPEN CONFERENCE CALL
There will be a conference call on Friday, February 10, 2006 at
8:00 a.m. CST to discuss the Company's fourth quarter and annual
results for 2005. The call will last approximately one hour and
feature remarks by Carl A. Siebel and Stephen J. Hagge, AptarGroup's
Chief Financial Officer. Interested parties are invited to listen to a
live webcast by visiting the Investor Relations page at
www.aptargroup.com. Replay of the conference call can also be accessed
on the Investor Relations page of the web site.
AptarGroup, Inc. is a leading global supplier of a broad range of
innovative dispensing systems for the personal care,
fragrance/cosmetic, pharmaceutical, household and food/beverage
markets. AptarGroup is headquartered in Crystal Lake, Illinois, with
manufacturing facilities in North America, Europe, Asia and South
America. For more information, visit the AptarGroup web site at
www.aptargroup.com.
This press release contains forward-looking statements.
Forward-looking statements are made pursuant to the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 and are based on
management's beliefs as well as assumptions made by and information
currently available to management. Accordingly, the Company's actual
results may differ materially from those expressed or implied in such
forward-looking statements due to known or unknown risks and
uncertainties that exist including, but not limited to, those related
to overall business conditions in the various markets in which the
Company operates, the competitive marketplace, fiscal and monetary
policy, changes in foreign exchange rates, direct or indirect
consequences of acts of war or terrorism, labor relations, successful
integration of acquisitions and other risks and uncertainties
discussed from time to time in the Company's filings with the
Securities and Exchange Commission, including its Form 10-K's and
10-Q's. Readers are cautioned not to place undue reliance on
forward-looking statements.
The following Condensed Consolidated Financial Statements are
unaudited.
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(In Thousands, Except Per Share Data)
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net Sales $338,814 $343,268 $1,380,009 $1,296,608
Cost of Sales
(exclusive of
depreciation
shown below) 226,978 230,665 923,867 866,865
Selling, Research
& Development and
Administrative 51,076 52,341 203,389 194,366
Depreciation and
Other
Amortization 24,443 23,814 99,242 94,493
Redeployment
Program 746 - 3,718 -
------------ ------------ ------------ ------------
Operating Income 35,571 36,448 149,793 140,884
Other
Income/(Expense):
Interest Expense (3,355) (2,494) (12,144) (10,012)
Interest Income 671 1,343 3,004 4,255
Equity in
Results of
Affiliates 429 406 1,646 1,323
Minority
Interests 259 (112) 342 (383)
Miscellaneous,
net 156 (17) (688) 1,110
------------ ------------ ------------ ------------
Income before
Income Taxes 33,731 35,574 141,953 137,177
Provision for
Income Taxes 10,019 11,561 41,919 43,890
------------ ------------ ------------ ------------
Net Income $23,712 $24,013 $100,034 $93,287
============ ============ ============ ============
Net Income per
Share - Basic $0.68 $0.67 $2.84 $2.58
============ ============ ============ ============
Net Income per
Share - Diluted $0.66 $0.65 $2.77 $2.51
============ ============ ============ ============
Average Number of
Shares - Basic 34,903 35,754 35,188 36,196
Average Number of
Shares - Diluted 35,935 36,940 36,177 37,157
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
CONSOLIDATED BALANCE SHEETS
December 31, 2005 December 31, 2004
ASSETS
Cash and Equivalents $117,635 $170,368
Receivables, net 260,175 266,894
Inventories 184,241 189,349
Other Current Assets 43,240 34,618
------------------- -------------------
Total Current Assets 605,291 661,229
Net Property, Plant and
Equipment 536,820 534,762
Goodwill, net 184,763 140,239
Other Assets 30,445 37,796
------------------- -------------------
Total Assets $1,357,319 $1,374,026
=================== ===================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Short-Term Obligations $102,103 $63,292
Accounts Payable and Accrued
Liabilities 218,659 213,569
------------------- -------------------
Total Current Liabilities 320,762 276,861
Long-Term Obligations 144,541 142,581
Deferred Liabilities 82,628 81,387
------------------- -------------------
Total Liabilities 547,931 500,829
Stockholders' Equity 809,388 873,197
------------------- -------------------
Total Liabilities and
Stockholders' Equity $1,357,319 $1,374,026
=================== ===================
APTARGROUP, INC.
Condensed Consolidated Financial Statements (Unaudited)
(continued)
(In Thousands)
SEGMENT INFORMATION
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
NET SALES
Dispensing Systems $285,104 $292,023 $1,147,394 $1,092,412
SeaquistPerfect 55,344 54,108 241,453 213,947
Intersegment
Eliminations (1,634) (2,863) (8,838) (9,751)
------------ ------------ ------------ ------------
Total Net Sales $338,814 $343,268 $1,380,009 $1,296,608
============ ============ ============ ============
SEGMENT INCOME (1)
Dispensing Systems $38,357 $38,657 $153,163 $142,623
SeaquistPerfect 3,605 3,721 21,143 18,089
Corporate Expenses
and Other (4,801) (5,653) (19,495) (17,778)
Redeployment
Program (2) (746) - (3,718) -
------------ ------------ ------------ ------------
Income before
Interest and
Taxes 36,415 36,725 151,093 142,934
Less: Interest
Expense, Net 2,684 1,151 9,140 5,757
------------ ------------ ------------ ------------
Income before
Income Taxes $33,731 $35,574 $141,953 $137,177
============ ============ ============ ============
Notes to Condensed Consolidated Financial Statements:
(1) - The Company evaluates performance of its business units and
allocates resources based upon income before interest expense
in excess of interest income, corporate expenses, income taxes
and unusual items.
(2) - Redeployment Program charges relate to the Dispensing
Systems segment.
CONTACT: AptarGroup, Inc.
Stephen J. Hagge, 815-477-0424